Wellington Scoop
Network

350 new homes for “revitalised” Shelly Bay in joint-venture plan

bay-shelly

News from WCC
The community is to be consulted on the proposed sale or lease of 1 ha of Wellington City Council-owned land to a joint-venture company seeking to develop and transform the Shelly Bay area.

The proposed development is a partnership between the Council and Shelly Bay Limited, a company set up by the Wellington Company led by Ian Cassels, and Taranaki Whānui /Port Nicholson Block Settlement Trust (PNBST).

If the project goes ahead, Shelly Bay would get 350 new properties including a 140-resident rest home, a boutique hotel with about 50 rooms, 280 apartments, 58 townhouses and 14 standalone houses.

Also envisaged are a ferry service, cafes, bars, retail, upgraded public areas including a village green, and possibly a brewery. The project would retain three key heritage buildings – Shed 9, the Shipwrights and Officers’ Mess buildings.

City Councillors this week agreed to consult on the sale and long-term lease of the Council’s land and buildings at Shelly Bay starting next month (May).

Under the arrangement the Council would lease or sell around 1 hectare of land to the joint-venture company Shelly Bay Limited.

Deputy Mayor Paul Eagle says the project would be a milestone in the city’s progress.

“This is obviously subject to further approval and then commercial negotiation – but the project would be a true partnership with the Council working with local iwi to deliver a good outcome for Wellington and that reflects our deepening relationship with PNBST.

“This area has sat dormant and underutilised for over a decade. A number of developers have tried and been unable to produce a compelling vision for the site. A partnership with Iwi will finally allow this area to be revitalised.

“The development would add another 350 homes to the city’s housing stock and open up an area of Wellington that is decaying.

“This is not a situation where the Council can afford to do nothing. Every year the basic upkeep of the Council’s land and buildings at Shelly Bay comes at a cost to Wellington ratepayers, which will amount to $6.1m over 10 years, and we will be no further forward,” he says.

“Alternatively, if we go ahead with the lease, sale and development, Council could actually be $1.75 million dollars better off at the end of the development due to proceeds from the sale and increases in rates, as well as a net $1.5 million increase in rates take each year into the future. The economic benefit to cost ratio during the construction of the project is 20 to 1. We think that is a compelling enough case that it’s worth consulting the public on.”

PNBST Chairman Wayne Mulligan says the Iwi’s aim is to develop Shelly Bay into a must-see destination to make Wellington more prosperous and enjoyable.

“We want to create a legacy for Wellington and for the region. This will be an area with real pull for tourists as well as Wellingtonians. We want to create a place where people can dine, walk, hike, live, bike, visit and stay.”

Wednesday’s meeting agreed that Cr Diane Calvert, the Council’s Community Planning and Engagement Portfolio Leader, chair a working group comprised of Crs Jill Day, Paul Eagle and Andy Foster and the three Eastern Ward Councillors – Chris Calvi-Freeman, Sarah Free and Simon Marsh, to work with officers and finalise the consultation process and associated material prior to the start of consultation.

Councillor Calvert says it’s important the public are given a full opportunity to make their views heard and that the full picture of the development is presented to them with all the information available.

The consent for the development was approved on Tuesday 18 April, but the proposed land sale and lease still needs to go through a public consultation process in compliance with the Local Government Act 2002 and gain final Council approval.

The resource consent application was filed under the Housing Accords Special Housing Areas Act, which was set up in 2013 to fast-track housing projects.

What is being proposed?

The Council has agreed to publicly consult on the proposed long-term lease and sale of just under 1 hectare of Council land to a Shelly Bay Limited. We own around 1200m2 of land in the area. We are proposing to retain green space and public parks that we currently own.

How much land does the Council own in Shelly Bay?

The Council owns 1 hectare of land at Shelly Bay.

How much is the Council selling the land for?

The Council has had the sites independently valued. The land sale and lease value is $7.8 million. The Council retains ownership of the public spaces including three parks and connecting promenade land – ensuring ongoing public access.

Why is the Council considering this?

The Council believes that by agreeing to a sale and long-lease of this section of Council land we will achieve a better result for Wellington in the overall redevelopment of Shelly Bay site.

If it goes ahead as proposed, the Shelly Bay development project will mean that infrastructure and property maintenance are brought back up to full operation. The project will also deliver new employment opportunities, provide more housing and retain public access to an area for tourism and recreation.

Why are you publicly consulting?

The proposed lease and sale arrangements have been reviewed against the Council’s significance policy. Council’s legal advice has determined this transaction as being of moderate significance. As a consequence Council has elected to consult with the public regarding the land disposals.

Who is involved in this project?

Port Nicholson Block Settlement Trust (PNBST) was established in August 2008 to administer the Treaty of Waitangi settlement of the Taranaki Whānui (TW), with TW’s rohe encompassing most of the area within Council’s boundaries. In 2008, PNBST purchased a 4.5 ha holding in Shelly Bay as part of the settlement.

The Wellington Company (TWC) is a Wellington-based property investment and development company with Ian Cassels and Caitlyn Taylor as its sole directors and shareholders.

Shelly Bay Limited (SBL) is the joint venture company set up by TWC and PNBST in January 2017 which owns the 4.5 ha of land at Shelly Bay for the purpose of facilitating the redevelopment of Shelly Bay.

Wellington City Council own 1 ha of land at Shelly Bay which it is now being asked to sell or release on a long-lease to make the Shelly Bay development project possible.

What costs are proposed to be borne by the Council and what are being proposed to be borne by the development company?

This is a mixed use development – a model has been used for the development of Wellington Waterfront. It is a mixed use area involving the long-term lease of public land for commercial and retail, complemented by public space improvements for the benefit of Wellingtonians. We want to make sure that this development also features high quality open and green space for all Wellingtonians to enjoy. We think a joint approach to funding the public infrastructure for this development is the best way to achieve that, subject to ongoing commercial negotiations.

These negotiations reflect the significant public benefit accruing from the development – including delivery of three parks, remediation of Council owned buildings, provision of ferry landing areas and other amenities.

What is the impact on Council’s financial position

The final impact will depend on commercial negotiations. However we estimate that Council will come out around $1.75 million better off at the end of the development as any the contribution to infrastructure could be offset by the income from the sale and leasing of land, and the uplift in rates from the newly developed homes and businesses. After the development is completed, we estimate a $1.5 million per year uplift in rates for the future. The project will inject $396 million of economic benefits into the local economy during the construction period.

Will there be a cycle path?

A 1.5 metre lime-chip pathway will extend from the Miramar cutting through to the Shelly Bay site. This will provide a shared space for pedestrians and cyclists alike.

Why is the Council doing this when it is usually for the developers to take on that expense?

Considerable under-investment in this area over the years has resulted in the dilapidation of the wharves, public spaces, seawalls and buildings. Council is requiring a high standard of public amenity – including ferry landing, parks and promenades and building remediation. The level and standard of investment required is made possible by the addition of a Council contribution and is consistent with our approach to consider public funding for the public good.

The Council looks at each project on a case-by-case basis to determine the best outcome for Wellingtonians.

How much is Shelly Bay valued at?

The Council has obtained a commercial valuation which puts the value of the land at around $10m in total. A proportion of the land is being held back by the Council equivalent to around $2m to provide a public park, enhanced public amenity and green space.

What is a Special Housing Area (SHA)

SHAs are areas where central government legislation allows the Council to offer qualifying developments a streamlined resource consenting path (through the Housing Accords and Special Housing Act (HASHAA)). The Council suggests SHAs to the Minister of Building and Housing for approval before they are created. Shelly Bay was designated an SHA in 2015.

What account has been taken for sea-level rise?

The site has been designed to accommodate a level of sea rise in line with expert predictions – i.e. 1.0 metre over 100 years

Would the council consider selling Shelly Bay to another developer?

The majority of the Shelly Bay site is in the hands of Taranaki Whanui/PNBST which has entered into a commercial development agreement with the Wellington Company.

In theory the Council could put its land for sale or lease on the open market but that would put the viability of the Shelly Bay development proposal at risk. The Council is keen to enter a deal that will lead to the upgrade of the site and the repair and reuse of a number of buildings.

Has the council consulted with any other developers about the land?

Over the past decade the Council has talked to a number of potential developers about the Shelly Bay area. Because the majority of the site is now owned by Taranaki Whānui /PNBST, it is logical for the Council to consider negotiating with that organisation and any developer with whom it is in partnership.

The challenge for other developers has been that due to the large land holdings of Taranaki Whānui /PNBST and WCC in the area it is difficult to put together a profitable development without working with those groups. That’s why this partnership is appealing enough that Council is consulting. WCC also has a strong partnership with Taranaki Whānui as mana whenua of this area and a commitment to work with them in the best interests of Wellington’s future.

Why is Taranaki Whānui partnering with the Wellington Company to develop Shelly Bay?

Taranaki Whānui selected the Wellington Company to work with them to develop their holdings at Shelly Bay.

14 comments:

  1. Mike, 28. April 2017, 16:46

    It is not clear what is proposed:
    a)long-term lease OR b) a sale of council land to Shelly Bay Limited. How much will the land be leased for?
    The developers let the WCC pay for marketing by funding 3 new parks for the development.

     
  2. Colin Ryder, 28. April 2017, 19:12

    Who’s paying for the provision of infrastructure?

     
  3. Michael, 28. April 2017, 19:50

    It is not clear how much the council are putting into the project in terms of infrastructure = roads, sewer and stormwater etc.

    There is little doubt the developers are in this to make money, so if council funding is to be made available, the council should insist on ensuring a high standard of construction to guarantee the development delivers what has been promised.

     
  4. Trumped, 28. April 2017, 20:52

    Can Cr Calvert ensure in the interest of transparency and accountability that the complete resource consent documents will be immediately available to the public for the consultation, and where they can be seen? Can she let us know whether the Council approved the resource consent on April 18, or whether this was done by officers? If by Councillors, who voted for this and against? Can Cr Calvert please ensure that accurate financial details are put before the public for comment? And also: What definition of “affordable housing” was used by the Council in approving this resource consent?

     
  5. Hel, 29. April 2017, 12:27

    Expressing the $1.5m rates revenue as some sort of benefit is disengenious at best, rates I understood are there to recover the costs of running Council so for there to be an extra $1.5m of rates revenue there must have been a similar increase in the costs. It is a zero sum game.

     
  6. Chris Calvi-Freeman, 29. April 2017, 13:31

    As an eastern ward councillor, I’m happy to provide an initial answer to the above questions. Some information can’t yet be released, but the consultation will aim to cover all the salient points and provide a clear and transparent analysis of the proposed sale and lease of council land required if the development is to proceed.

    Mike – some of the council owned land is proposed for sale, other parcels for long term lease, and some land would be retained in council ownership. The Council has had the sites independently valued. The combined land sale and lease value is $7.8 million.

    Colin and Michael – the infrastructure within the site and leading to the site (eg sewerage upgrade between the site and Miramar cutting) would be jointly funded by the developer and the council, subject to ongoing commercial negotiations.

    Trumped – the resource consent was approved by council officers as the development complies with the rules set out in the district plan. I would expect the other points to be covered within the forthcoming consultation.

    At my behest, we will also be seeking views on a range of improvements to the roads within the site and between it and Miramar cutting.

    Chris Calvi-Freeman, city councillor, eastern ward

     
  7. Troy H, 29. April 2017, 16:34

    Chris, Miramar is already vital and the economy there is already pumping, so the council isn’t selling to developers to make it what it already is. That is the reason why they want the prime beachfront land that has been grossly undervalued, with ratepayers also paying to “flash up the development area”.(landscaping of 3 parks, ferries from Shelly Bay, re-roading, etc.)
    What parcels of land will be leased (and for how much) and and what parcels will be sold (and for how much)?
    Is there clear title for the land?

     
  8. Wellington Commuter, 29. April 2017, 16:58

    @ Chris C-F: So the resource consent has been approved before public consultation begins! Does this mean that council officers have evaluated the proposal and found all the effects of the this major development for 350 new homes to be all “minor” ?

     
  9. Concerned Wellingtonian, 29. April 2017, 19:43

    Trumped – I wonder if Chris Calvi-Freeman has seen all the resource consent papers himself?

     
  10. Chris Calvi-Freeman, 29. April 2017, 19:47

    My reply this morning was intended to simply answer the factual questions posed. It’s not appropriate for me to debate the merits of the development.

    Troy H – The Council has had the sites independently valued. The land sale and lease value is $7.8 million. The precise details (boundaries) of the land in question will be set out in the consultation. The actual waterfront areas will remain in public ownership, for public use.

    Wellington Commuter – The development already has resource consent because it falls within the existing development rules for the site. The forthcoming consultation will give everyone the opportunity to say whether they believe the council should sell, lease or retain the land in question to allow the development to proceed.

    I hope this clarifies the situation as I won’t be making further comment until the consultation process is completed.

     
  11. CC, 29. April 2017, 21:02

    It seems as though nothing has changed with the new Council. The administration still decides which developers and entities are gifted the right to make healthy profits on the backs of the ratepayers, followed by ‘consultation’. Seemingly, a convenient zoning at Shelly Bay means there are no impediments to high rise conglomerates of commercial and residential developments. One can only hope that Cr. Calvert in her community engagement role will come up trumps with a dose of honesty and transparency.

     
  12. Mike, 30. April 2017, 8:46

    Chris, the 1 h of beachfront property has been undervalued.
    CC, there is no transparency in this deal, just more ratepayer funding for developers’ profiteering.

     
  13. Chris Calvi-Freeman, 30. April 2017, 10:26

    Oh dear… I said I wouldn’t comment further (as I am wary of arguing the case for the development as opposed to simply clarifying the issues as was my intent), but it seems that people haven’t read the article before commenting.

    CC: The Wellington Company has brokered an agreement with the owners of the adjacent land, the Port Nicholson Block Settlement Trust, which owns the majority of the land at Shelly Bay. A development entirely on that land would still leave the council (i.e. ratepayers) liable for the ongoing maintenance of the council land and the run-down buildings which sit upon it – not exactly a joined-up result. Selling and/or leasing part of the council land to the same developer would allow a more complete development and yield funds to allow the remaining council land (the waterfront bits which are to be retained in public ownership) to be maintained and improved for everyone to enjoy. If another developer had done what the Wellington Company had done, the council would be dealing with that developer instead. There is no element of pre-selection or favouritism here – in fact the council is negotiating with Shelly Bay Limited (SBL), the joint venture company set up by The Wellington Company and PNBST.

    Mike: I’ll say again – the council land has been independently valued. The other developer, who presented very briefly in the open session of last week’s council meeting as reported in the Dom Post, appeared to believe that the council intended to sell or lease its entire landholding. That developer’s expressed valuation of the land currently intended for sale or lease was, pro-rata, the same as the council’s.valuation. That developer had no agreement with the PNBST, had prepared no scheme plans and appeared to believe the council’s land could simply be sliced into sections for sale, right down to the waterfront, with the road rerouted behind the sections, denying everyone else access to the waterfront.

    In summary, the council is going to consult on the sale and lease of part of its landholdings to facilitate a mixed-use development which already complies with council’s established zoning rules and which would span existing council and PNBST land, providing a net financial gain to council over and above the cost of the council’s contribution to the improvement of infrastructure to and within the site. The outcome, if the development proceeds, would be the transformation of a neglected area into a high quality residential, leisure and tourist destination. Negotiations on the extent of the council’s and developer’s respective contributions to the infrastructure (including improved road access) will aim to achieve the best possible outcome for Wellington.

     
  14. Trumped, 1. May 2017, 9:54

    Is Cr Eagle really speaking asthe hopeful M.P. for Rongotai here, not as a councillor, or both? Has he consulted his future constituents? I am not convinced that this area needs to be “revitalised” or that it has “sat dormant and underutilised.” I prefer evolution not imposition (of a development).There has evolved there now an amazing cafe, excellent food, innovative outdoor area and provision for children. plus an art and arts community and a walking community with access to Watts (Miramar) Peninsula.

    We could have there a unique Wellington creation instead of a precocious import from America/SanFrancisco Sausalito? We could also have affordable (and social) housing there tomorrow – without huge cost – utilising existing buildings.

    Waterfront land and undeveloped (green) space are described by developers, (not aspiring Labour MPs), as “dormant”…for somewhat obvious personal gain.

     

Write a comment: